Court rejects Lidl bid to annul competition ruling over two-year director general vacancy

The Civil Court’s Commercial Section has turned down Lidl’s attempt to overturn a competition decision on the basis that Malta’s Director General for Competition post had been left vacant for almost two years.

In a partial judgment delivered on Monday, Judge Ian Spiteri Bailey held that decisions signed by an Acting Director General remain legally valid.

Lidl Malta and Lidl Immobiliare had asked the court to declare the Office for Competition’s prohibition of their proposed transaction was null, arguing that only the Director General can issue such decisions under the Control of Concentrations Regulations.

Since the post had been vacant since October 2023, they said, the decision was invalid and the transaction should be considered automatically approved.

The companies pointed to the decision being signed by ‘Melchior Vella, Director,’ rather than Director General, claiming that the exclusive statutory power rests only with the DG.

The respondent countered that the office had no choice but to ensure continuity, with Vella formally appointed Acting Director General for concentrations in November 2023 by the MCCAA Board of Governors.

The office also stressed Lidl had actively participated in the investigation, including an earlier favourable decision signed by Vella, without ever contesting his authority. Raising objections only after an unfavourable outcome, the office argued, breached the EU law principle preventing parties from contradicting their own conduct.

Testimony confirmed that the vacancy was public knowledge, with calls for applications issued, although no formal notification was given to merging parties. Permanent Secretary Jonathan Vassallo attributed delays in filling the post to difficulties identifying suitable candidates.

In its judgment, the court described acting appointments as an essential tool for continuity in public administration, noting that similar temporary arrangements exist in the Constitution.

Although the law does not expressly provide for an “Acting Director General,” the Court said this does not prevent such a role from being created to avoid regulatory paralysis, especially in merger control where strict deadlines apply.

Judge Spiteri Bailey remarked that accepting Lidl’s position would lead to “free for all and total anarchy” in competition enforcement whenever the DG post is vacant.

The court also criticised the administration for allowing the vacancy to persist for nearly two years, calling the explanations offered “puerile excuses” and reminding that acting roles are meant to be temporary.

The court therefore rejected Lidl’s first request, ordering that the rest of the case continue. Costs of the partial judgment were awarded against the applicants, and the ruling is being forwarded to the Office of the Prime Minister and other senior officials.